Critical Review: CareTrust REIT (CTRE) versus Its Peers

CareTrust REIT (NYSE:CTRE) is one of 111 public companies in the “REIT – EQTY TRUST – OTHER” industry, but how does it compare to its competitors? We will compare CareTrust REIT to similar businesses based on the strength of its risk, analyst recommendations, earnings, dividends, valuation, institutional ownership and profitability.

Profitability

This table compares CareTrust REIT and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CareTrust REIT	58.90%	7.60%	5.90%
CareTrust REIT Competitors	-1.08%	-3.69%	0.82%

Analyst Ratings

This is a breakdown of current recommendations and price targets for CareTrust REIT and its competitors, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CareTrust REIT	0	1	1	0	2.50
CareTrust REIT Competitors	1890	7153	7785	238	2.37

As a group, “REIT – EQTY TRUST – OTHER” companies have a potential upside of 13.08%. Given CareTrust REIT’s competitors higher probable upside, analysts plainly believe CareTrust REIT has less favorable growth aspects than its competitors.

Volatility and Risk

CareTrust REIT has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500. Comparatively, CareTrust REIT’s competitors have a beta of 1.19, indicating that their average stock price is 19% more volatile than the S&P 500.

Valuation and Earnings

This table compares CareTrust REIT and its competitors gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
CareTrust REIT	$277.03 million	$125.08 million	28.80
CareTrust REIT Competitors	$1.49 billion	$127.62 million	90.37

CareTrust REIT’s competitors have higher revenue and earnings than CareTrust REIT. CareTrust REIT is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Insider and Institutional Ownership

87.8% of CareTrust REIT shares are owned by institutional investors. Comparatively, 75.9% of shares of all “REIT – EQTY TRUST – OTHER” companies are owned by institutional investors. 0.5% of CareTrust REIT shares are owned by insiders. Comparatively, 5.9% of shares of all “REIT – EQTY TRUST – OTHER” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

CareTrust REIT pays an annual dividend of $1.34 per share and has a dividend yield of 3.9%. CareTrust REIT pays out 111.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “REIT – EQTY TRUST – OTHER” companies pay a dividend yield of 4.7% and pay out 345.3% of their earnings in the form of a dividend.

Summary

CareTrust REIT competitors beat CareTrust REIT on 8 of the 15 factors compared.

CareTrust REIT Company Profile

CareTrust REIT, Inc. is a self-administered, publicly-traded real estate investment trust engaged in the ownership, acquisition, development and leasing of skilled nursing, seniors housing and other healthcare-related properties. With a nationwide portfolio of long-term net-leased properties, and a growing portfolio of quality operators leasing them, CareTrust REIT is pursuing both external and organic growth opportunities across the United States.